ISLAMABAD: A senior energy expert, while challenging some of the findings of the report of the inquiry commission on petroleum shortages in June 2020, said the alleged impact of Rs2 billion of petroleum shortage was incorrect.
Islamabad Policy Institute’s Distinguished Fellow on Energy Sector Dr Ilyas Fazil, who has previously served as Member (Oil) at the Oil and Gas Regulatory Authority and Chief Executive of Oil Companies Advisory Committee, was speaking at an in-house discussion on the report submitted by the 15-member Inquiry Commission on the petrol crisis.
The IPI fellow believed that the recommendations given by the commission were “very harsh, uncalled for, and unrealistic”.
Addressing the newly-constituted four-member commission, which has been mandated to finalise the recommendations based on the commission’s report, Dr Fazil hoped that mistakes would not be compounded by taking the proposed drastic action.
Dr Fazil noted that despite the effort with which the report had addressed the subject, certain crucial angles that contributed to the June crisis were missing from the report.
In this regard, he said that the report did not, for instance, looked into the delay in the conversion of White Oil Pipeline, which could have helped avoid the crisis.
He also viewed that there was little discussion about non-upliftment of furnace oil from local refineries, and the decision about back to back major reduction in the petroleum prices.
Dr Fazil said the report also did not explain how the crisis could have occurred, if 70 percent of the refined fuels market share belonged to three of the top 10 oil marketing companies.
“It seems strange that on the one hand the report alleges presence of ample stocks that were deliberately withheld, and on the other hand, it has blamed the OMCs for not maintaining stocks in the face of import bans, and delaying the berthing of their vessels,” he said, while referring to what he saw as a glaring contradiction in the report.
Mentioning another inaccuracy in the report, Dr Fazil said it was claimed in the report that a vessel “MT Ploutus”, which carried ~ 58,000 MTons for 7 OMCs, was deliberately held back at the outer anchorage.
Contrary to this assertion, he recalled that the record of the affected OMCs, and the OCAC correspondence with the Ministry of Energy’s Petroleum Division pleading for the berthing of the vessel had been shared with the commission.
Despite the requests in the said correspondence, the expert said, the permission was received from MoEPD on June 29, 2020, 14 days after the vessel’s arrival and after out of turn berthing of another OMC’s vessel.
“This obviously resulted not only in the onshore storages of the OMCs going dry but also prevented the movement of 58,000 tons out of Karachi to feed up-country outlets. These facts have been totally ignored,” he said.
“The alleged impact of Rs2 billion is hence utterly incorrect. The report clearly states that a PSO ship was forced to discharge earlier by MoEPD by violating the priority queues for MT Ploutos confirming these facts on the one hand, but on the other hand strangely recommended that the “gains” should be recovered from the OMCs,” he maintained.
“Did the OMCs whose product was on MT Ploutus not suffer demurrages and serious financial loss during the 14 days delay due to PSO’s tanker? What was the pricing of the product on that vessel, which has not been recognised by the Commission and a simplistic calculation has been presented which defies the ground realities,” Dr Fazil regretted.
Copyright Business Recorder, 2020
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